<PAGE>

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                                    UNITED STATES     
                          SECURITIES AND EXCHANGE COMMISSION
                               Washington, D.C.  20549
                                   __________________
                                           
                                      FORM 10-Q
                                           
[ X ]    Quarterly report pursuant to Section 13 or 15(d) of the Securities
         Exchange Act of 1934

                   FOR THE QUARTERLY PERIOD ENDED OCTOBER 31, 1997
OR

[   ]    Transition report pursuant to Section 13 or 15(d) of the Securities
         Exchange Act of 1934

                         COMMISSION FILE NUMBER:   001-11807
                               ___________________________
                                           
                                  UNIFY  CORPORATION
                (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
                                           
             Delaware                              94-2710559          
  --------------------------------       --------------------------------
  (STATE OR OTHER JURISDICTION OF        (I.R.S. EMPLOYER IDENTIFICATION
  INCORPORATION OR ORGANIZATION)                      NUMBER)

                             181 METRO DRIVE, THIRD FLOOR
                             SAN JOSE, CALIFORNIA  95110
                       (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
                                           
                              TELEPHONE:  (408) 467-4500
                 (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
                                           
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
                         YES     X              NO           
                              --------              -------

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

   8,340,905 shares of Common Stock, $0.001 par value, as of November 30, 1997
                                           
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<PAGE>

                                  UNIFY CORPORATION
                                      FORM 10-Q
                                           
                                        INDEX
                                           
                                                                       PAGE
                                                                      NUMBER
                                                                      ------

PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

         Condensed Consolidated Balance Sheets as of
           October 31, 1997 and April 30, 1997.......................     3

         Condensed Consolidated Statements of Operations for
           the three and six months ended October 31, 1997 
           and 1996..................................................     4

         Condensed Consolidated Statements of Cash Flows
           for the six months ended October 31, 1997 and 1996........     5

         Notes to Condensed Consolidated Financial Statements........     6

Item 2.  Management's Discussion and Analysis of
           Financial Condition and Results of Operations.............     7


PART II. OTHER INFORMATION

Item 5.  Other Information...........................................    12

Item 6.  Exhibits and Reports on Form 8-K............................    12

SIGNATURE............................................................    13

Exhibit 11.1  Statement of Computation of Net Loss Per Share.........    14




                                       2
<PAGE>

                                          
PART I.  FINANCIAL INFORMATION
ITEM 1.  FINANCIAL STATEMENTS


                                  UNIFY CORPORATION
                        CONDENSED CONSOLIDATED BALANCE SHEETS
                                    (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                      
                                                  October 31,      April 30,
                                                      1997           1997  
                                                  -----------      ---------
ASSETS                                            (unaudited)         (1)
<S>                                               <C>              <C>
Current assets:
   Cash and cash equivalents                        $ 5,619        $ 9,513
   Short-term investments                             5,444          7,133
   Accounts receivable, net                           4,168          4,557
   Prepaid expenses and other current assets            414            526
                                                   --------       --------
      Total current assets                           15,645         21,729

Property and equipment, net                           2,321          2,415
Other assets                                            141            294
                                                   --------       --------
      Total assets                                  $18,107        $24,438
                                                   --------       --------
                                                   --------       --------

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Current portion of long-term debt                $   103        $ 2,378
   Accounts payable                                   1,156          1,586
   Amounts due to minority interest stockholders        828            830
   Accrued compensation and related expenses          1,949          1,972
   Other accrued liabilities                          3,024          3,797
   Deferred revenue                                   3,282          3,531
                                                   --------       --------
      Total current liabilities                      10,342         14,094

Long-term debt, net of current portion                   35             58
Minority interest                                       287            324

Stockholders' equity:
   Common stock                                           8              8
   Additional paid-in capital                        53,296         52,965
   Notes receivable from stockholders                  (212)          (207)
   Cumulative translation adjustments                  (704)          (767)
   Accumulated deficit                              (44,945)       (42,037)
                                                   --------       --------
      Total stockholders' equity                      7,443          9,962
                                                   --------       --------
      Total liabilities and stockholders' equity    $18,107        $24,438
                                                   --------       --------
                                                   --------       --------
</TABLE>

(1)  Derived from audited financial statements.


      See accompanying notes to condensed consolidated financial statements.
                                           
                                          3

<PAGE>


                                  UNIFY CORPORATION
                   CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                        (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                     (UNAUDITED)
                                           
                                           
<TABLE>
<CAPTION>

                                                  Three Months Ended Oct. 31,     Six Months Ended Oct.31,
                                                  ---------------------------     ------------------------
                                                      1997           1996           1997           1996
                                                  -----------    ------------     ---------    -----------
<S>                                                 <C>            <C>            <C>            <C>
Revenues:
   Software licenses                                $ 3,994        $ 4,847        $ 6,863        $ 8,826
   Services                                           2,270          2,498          4,535          4,747
   Amnesty license arrangement                            -              -              -          2,812
                                                    -------        -------        -------        -------
      Total revenues                                  6,264          7,345         11,398         16,385
                                                    -------        -------        -------        -------

Cost of revenues:
   Software licenses                                    130            287            363            643
   Services                                           1,143          1,164          2,224          2,292
                                                    -------        -------        -------        -------
      Total cost of revenues                          1,273          1,451          2,587          2,935
                                                    -------        -------        -------        -------

Gross margin                                          4,991          5,894          8,811         13,450
                                                    -------        -------        -------        -------

Operating expenses:
   Product development                                1,526          1,683          2,974          3,374
   Selling, general and administrative                4,296          5,800          8,856         11,467
                                                    -------        -------        -------        -------
      Total operating expenses                        5,822          7,483         11,830         14,841
                                                    -------        -------        -------        -------

      Loss from operations                             (831)        (1,589)        (3,019)        (1,391)
Other income, net                                       141             67            201            114
                                                    -------        -------        -------        -------
      Loss before income taxes                         (690)        (1,522)        (2,818)        (1,277)
Provision for income taxes                              (43)           (54)           (90)          (112)
                                                    -------        -------        -------        -------
      Net loss                                      $  (733)       $(1,576)       $(2,908)       $(1,389)
                                                    -------        -------        -------        -------
                                                    -------        -------        -------        -------

Net loss per share                                  $ (0.09)       $ (0.20)       $ (0.35)       $ (0.19)
                                                    -------        -------        -------        -------
                                                    -------        -------        -------        -------

Shares used in computing net
loss per share                                        8,252          7,917          8,201          7,292
                                                    -------        -------        -------        -------
                                                    -------        -------        -------        -------

</TABLE>

        See accompanying notes to condensed consolidated financial statements.
                                           
                                          4

<PAGE>

                                  UNIFY CORPORATION
                   CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                    (IN THOUSANDS)
                                     (UNAUDITED)
<TABLE>
<CAPTION>
                                                                      
                                                                 Six Months Ended October 31,
                                                                 ----------------------------
                                                                     1997           1996
                                                                 ------------    ------------
<S>                                                              <C>             <C>
Cash flows from operating activities:
   Net loss                                                       $ (2,908)      $ (1,389)
   Reconciliation of net loss to net cash used in
   operating activities:                                                  
      Depreciation                                                     530            668
      Provision for losses on accounts receivable                       80              -
      Minority interest                                                (37)            (2)
      Liquidation of Benelux subsidiary                                136              -
      Imputed interest on stockholder line of credit                     -            145
      Changes in operating assets and liabilities:                                       
         Accounts receivable                                           388         (4,929)
         Prepaid expenses and other current assets                     117            200
         Accounts payable                                             (457)          (497)
         Amounts due to minority interest stockholders                 (19)          (120)
         Accrued compensation and related expenses                     (34)           926
         Other accrued liabilities                                    (790)           843
         Deferred revenue                                             (293)          (651)
                                                                 ---------       --------
            Net cash used in operating activities                   (3,287)        (4,806)
                                                                 ---------       --------

Cash flows from investing activities:
   Purchases of available-for-sale securities                       (5,309)       (10,141)
   Sales of available-for-sale securities                            6,998          1,971
   Purchases of property and equipment                                (430)          (701)
   Other assets                                                        168             74
                                                                 ---------       --------
            Net cash provided by (used in) investing activities      1,427         (8,797)
                                                                 ---------       --------

Cash flows from financing activities:
   Principal payments under debt obligations                        (2,298)          (162)
   Proceeds from issuance of common stock, net                         331         23,281
   Collection of notes receivable from stockholders, net of
      interest accrual                                                  (5)            63
                                                                 ---------       --------
            Net cash (used in) provided by financing activities     (1,972)        23,182
                                                                 ---------       --------

Effect of exchange rate changes on cash                                (62)            47
                                                                 ---------       --------
Net (decrease) increase in cash and cash equivalents                (3,894)         9,626
Cash and cash equivalents, beginning of period                       9,513          3,028
                                                                 ---------       --------
Cash and cash equivalents, end of period                          $  5,619       $ 12,654
                                                                 ---------       --------
                                                                 ---------       --------

Supplemental schedule of noncash investing and financing 
  activities:
   Conversion of redeemable preferred stock and accrued 
      dividends to common stock                                   $      -       $ 26,726
                                                                 ---------       --------
                                                                 ---------       --------
Cash paid during the period for:
   Interest                                                           $274            $45
                                                                 ---------       --------
                                                                 ---------       --------
   Income taxes                                                        $80            $93
                                                                 ---------       --------
                                                                 ---------       --------
                                                                      
</TABLE>
        See accompanying notes to condensed consolidated financial statements.
                                           
                                           
                                          5
<PAGE>

                                  UNIFY CORPORATION
                 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                           

1.  BASIS OF PRESENTATION

    The condensed consolidated financial statements have been prepared by 
Unify Corporation (the "Company") pursuant to the rules and regulations of 
the Securities and Exchange Commission ("SEC").  While the interim financial 
information contained in this filing is unaudited, the financial statements 
presented reflect all adjustments (consisting only of normal recurring 
adjustments) which the Company considers necessary for a fair presentation of 
the financial position as of October 31, 1997 and April 30, 1997,the results 
of operations for the three and six months ended October 31, 1997 and 1996, 
and the cash flows for the six months ended October 31, 1997 and 1996.  The 
results for interim periods are not necessarily indicative of the results to 
be expected for the entire fiscal year.  These financial statements should be 
read in conjunction with the Consolidated Financial Statements and Notes 
thereto, together with Management's Discussion and Analysis of Financial 
Condition and Results of Operations, which are included in the Company's 
Annual Report on Form 10-K for the year ended April 30, 1997 as filed with 
the SEC.

2.  LONG-TERM DEBT

    At April 30, 1997, the Company had a line of credit provided by certain 
stockholders.  The Company retired the full $2.2 million balance due under 
this credit facility upon its expiration in July 1997.

3.  NEW ACCOUNTING PRONOUNCEMENTS

    In February 1997, the Financial Accounting Standards Board issued 
Statement of Financial Accounting Standards ("SFAS") No. 128, EARNINGS PER 
SHARE.  The Company is required to adopt SFAS No. 128 in the third quarter of 
fiscal 1998 and at that time will restate earnings per share data for prior 
periods to conform with the provisions of SFAS No. 128.  Earlier application 
is not permitted.  If SFAS No. 128 had been in effect for the three and six 
months ended October 31, 1997 and 1996, basic and diluted net loss per share 
would not have been significantly different than net loss per share currently 
reported for those periods.

    In June 1997, the Financial Accounting Standards Board issued two new 
SFASs.  SFAS No. 130, REPORTING COMPREHENSIVE INCOME, requires that an 
enterprise report, by major components and as a single total, the change in 
its net assets from nonowner sources during the period.  SFAS No. 131, 
DISCLOSURES ABOUT SEGMENTS OF AN ENTERPRISE AND RELATED INFORMATION, 
establishes annual and interim reporting standards for an enterprise's 
business segments and related disclosures about its products, services, 
geographic areas and major customers. Adoption of these statements will not 
impact the Company's consolidated financial position, results of operations 
or cash flows.  Both statements are effective for fiscal years beginning 
after December 15, 1997, with earlier application permitted.

                                          6
                                           
<PAGE>

                                  UNIFY CORPORATION
                                           

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS

    THE DISCUSSION IN THIS QUARTERLY REPORT ON FORM 10-Q CONTAINS 
FORWARD-LOOKING STATEMENTS THAT HAVE BEEN MADE PURSUANT TO THE PROVISIONS OF 
THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995.  SUCH FORWARD-LOOKING 
STATEMENTS ARE BASED ON CURRENT EXPECTATIONS, ESTIMATES AND PROJECTIONS ABOUT 
THE SOFTWARE INDUSTRY AND CERTAIN ASSUMPTIONS MADE BY THE COMPANY'S 
MANAGEMENT.  WORDS SUCH AS "ANTICIPATES", "EXPECTS", "INTENDS", "PLANS", 
"BELIEVES", "SEEKS", "ESTIMATES", VARIATIONS OF SUCH WORDS AND SIMILAR 
EXPRESSIONS ARE INTENDED TO IDENTIFY SUCH FORWARD-LOOKING STATEMENTS.  THESE 
STATEMENTS ARE NOT GUARANTEES OF FUTURE PERFORMANCE AND ARE SUBJECT TO 
CERTAIN RISKS, UNCERTAINTIES AND ASSUMPTIONS THAT ARE DIFFICULT TO PREDICT;  
THEREFORE, ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE EXPRESSED OR 
FORECASTED IN ANY SUCH FORWARD-LOOKING STATEMENTS.  SUCH RISKS AND 
UNCERTAINTIES INCLUDE, BUT ARE NOT LIMITED TO, THOSE SET FORTH HEREIN UNDER 
"VOLATILITY OF STOCK PRICE AND GENERAL RISK FACTORS AFFECTING QUARTERLY 
RESULTS."  UNLESS REQUIRED BY LAW, THE COMPANY UNDERTAKES NO OBLIGATION TO 
UPDATE PUBLICLY ANY FORWARD-LOOKING STATEMENTS, WHETHER AS A RESULT OF NEW 
INFORMATION, FUTURE EVENTS OR OTHERWISE.  HOWEVER, READERS SHOULD CAREFULLY 
REVIEW THE RISK FACTORS SET FORTH IN OTHER REPORTS OR DOCUMENTS THE COMPANY 
FILES FROM TIME TO TIME WITH THE SEC, PARTICULARLY THE COMPANY'S ANNUAL 
REPORTS ON FORM 10-K, QUARTERLY REPORTS ON FORM 10-Q AND ANY CURRENT REPORTS 
ON FORM 8-K.

    The following discussion should be read in conjunction with the unaudited 
Condensed Consolidated Financial Statements and Notes thereto in Part I, Item 
1 of this Quarterly Report on Form 10-Q and with the audited Consolidated 
Financial Statements and Notes thereto, together with Management's Discussion 
and Analysis of Financial Condition and Results of Operations, which are 
included in the Company's Annual Report on Form 10-K for the year ended April 
30, 1997 as filed with the SEC.

RESULTS OF OPERATIONS

REVENUES

    The Company recognizes software license revenue when a noncancelable 
license agreement has been executed, the product has been shipped, all 
significant contractual obligations have been satisfied and collection of the 
resulting receivable is deemed probable by management.  Software licenses 
include both development and deployment licenses, with pricing for graphical 
products generally based upon the number of developers or end users, as 
applicable.  Customer maintenance revenues are recognized ratably over the 
maintenance period.  Payments for maintenance fees are generally received in 
advance and are nonrefundable.  Revenues from consulting and training 
services are recognized as the services are performed.

    The Company's strategy is to aggressively market and enhance its 
graphical products, Unify VISION and VISION/Web.  The Company continues to 
support its extensive installed base of Unify ACCELL and DataServer character 
products, which the Company believes represents a significant source of 
potential customers for Unify VISION and VISION/Web.  The Company also 
generates significant revenues from services, including customer maintenance, 
consulting and training. The following table sets forth revenues from 
licenses of its graphical and character products and from services for the 
periods indicated:

                                          7


<PAGE>

                                  UNIFY CORPORATION
                                           
<TABLE>
<CAPTION>
                                                                      
                                                  Three Months Ended Oct. 31,     Six Months Ended Oct.31,
                                                  ---------------------------     ------------------------
                                                     1997            1996           1997           1996   
                                                  -----------     -----------     ---------     ----------
<S>                                               <C>             <C>             <C>           <C>
License revenues:
   Graphical                                       $ 2,008         $ 1,749        $ 3,265        $ 3,943
   Character                                         1,986           3,098          3,598          4,883
                                                   -------         -------        -------        -------
      Total license revenues                         3,994           4,847          6,863          8,826
Services revenues                                    2,270           2,498          4,535          4,747
Amnesty license arrangement                              -               -              -          2,812
                                                   -------         -------        -------        -------
      Total revenues                               $ 6,264         $ 7,345        $11,398        $16,385
                                                   -------         -------        -------        -------
                                                   -------         -------        -------        -------
</TABLE>

    Total revenues for the three and six months ended October 31, 1997 
decreased 15% and 30%, respectively, over the same periods of the prior year. 
Graphical license revenues for those periods were 15% higher than the same 
quarter of the prior year but 17% lower than the same six-month period of the 
prior year .  The increase in graphical license revenues for the quarter 
ended October 31, 1997 was primarily because of a single Unify VISION sale 
totaling $1 million in that quarter.  The Company does not anticipate that it 
will record any single license of similar size during the quarter ending 
January 31, 1998. Accordingly, in order to maintain the same level of 
graphical license revenue as recorded for the quarter ended October 31, 1997, 
the Company will need to obtain a substantial number of additional smaller 
licenses. There is no assurance that such licenses can be obtained during the 
quarter.  The decrease in graphical license revenues for the six months ended 
October 31, 1997 was primarily attributable to the rebuilding of the North 
American sales team and continuing longer sales cycles associated with the 
Company's solicitation of larger, enterprise-level sales transactions.  
Character license revenues for the three and six months ended October 31, 
1997 decreased 36% and 26%, respectively, over the same periods of the prior 
year, principally because of the general decline in demand for character 
products and the Company's continued focus on its graphical products.  
Service revenues for the three and six months ended October 31, 1997 
decreased 9% and 4%, respectively, over the same periods of the prior year 
primarily because of a 10% decline in the total value of maintenance 
contracts obtained during the third and fourth quarters of fiscal 1997 which 
was associated with lower total license revenues in those quarters as 
compared to the same quarters of the prior year.

    International revenues decreased to 47% of total revenues in the quarter 
ended October 31, 1997 from 59% of total revenues in the same quarter of the 
prior year due to weaker Pacific Rim sales coupled with slightly stronger 
U.S. sales in the fiscal 1998 quarter.  International revenues decreased to 
49% of total revenues in the six months ended October 31, 1997 from 60% of 
total revenues in the same period of the prior year primarily because of two 
international sales totaling $3.9 million which occurred in the first quarter 
of fiscal 1997.  The $2.8 million international amnesty license arrangement 
for the use of unauthorized copies of the Company's character products was 
subsequently reversed in the third quarter of fiscal 1997 when the Company 
determined that it would be unable to collect payments due pursuant to this 
arrangement.

     The Company made significant changes in the management and structure of 
its sales and marketing organizations and released Unify VISION 3.0 and 
VISION/Web during the second half of fiscal 1997.  As a result, the Company 
began to experience new opportunities to compete for larger, enterprise-level 
sales transactions which were accompanied by significantly longer sales 
cycles.  The Company expects that it will continue to experience extended 
customer evaluation and decision-making processes for large, complex Unify 
VISION and VISION/Web sales transactions over the next several quarters.  The 
 Company also expects that in the near


                                          8
<PAGE>

                                  UNIFY CORPORATION
                                           

term it is likely that a significant portion of Unify VISION and VISION/Web 
sales to new customers may be for pilot programs and therefore modest in size.

COST OF REVENUES

    Cost of software licenses for the quarter and six months ended October 
31, 1997 decreased to 3% and 5% of license revenues, respectively, as 
compared to 6% and 7% of license revenues for the same periods of the prior 
year.  The decreases in cost of software licenses in absolute dollars and as 
a percentage of license revenues in both of the fiscal 1998 periods were due 
to continuing efficiencies achieved in the U.S. and Japan.

    Cost of services for the three and six months ended October 31, 1997 were 
comparable in absolute dollars but slightly higher as a percentage of service 
revenues compared to the same periods of the prior year, principally because 
of somewhat lower maintenance revenues in the second quarter of fiscal 1998.  
As the Company increases its emphasis on providing comprehensive application 
development solutions in fiscal 1998 it expects that consulting service costs 
will increase, possibly significantly and at a faster rate than consulting 
revenues increase.

PRODUCT DEVELOPMENT

    Product development expenses for the quarter ended October 31, 1997 
decreased to $1.5 million, or 24% of total revenues, as compared to $1.7 
million, or 23% of total revenues, for the same quarter of the prior year. 
Product development expenses for the six months ended October 31, 1997 
decreased to $3.0 million, or 26% of total revenues, as compared to $3.4 
million, or 21% of total revenues, for the same period of the prior year.  
The declines in product development expenses in absolute dollars were 
attributable to a decrease in contract staffing in the first half of fiscal 
1998 from the level of staffing required in the first half of fiscal 1997 to 
complete Unify VISION 3.0 and VISION/Web in a timely manner.  The increases 
in product development expenses as a percentage of total revenues were 
because of the decline in fiscal 1998 revenues as compared to the same period 
of the prior year.  The Company believes that substantial investment in 
product development is critical to maintaining technological leadership and 
therefore intends to continue to devote significant resources to product 
development.

SELLING, GENERAL AND ADMINISTRATIVE

    Selling, general and administrative ("SG&A") expenses for the quarter 
ended October 31, 1997 decreased to $4.3 million, or 69% of total revenues, 
as compared to $5.8 million, or 79% of total revenues, for the same quarter 
of the prior year.  SG&A expenses for the six months ended October 31, 1997 
decreased to $8.9 million, or 78% of total revenues, as compared to $11.5 
million, or 70% of total revenues, for the same period of the prior year.  
Fiscal 1998 SG&A expenses decreased in absolute dollars compared to the same 
periods of the prior year as the Company continued to manage expenses and 
rebuild the North American sales team.  As expected, the cost savings 
experienced in SG&A during the first quarter of fiscal 1998 did abate during 
the second quarter as additional sales staff were hired or redeployed into 
the new sales organization; however, these additional expenses were more than 
offset by cost savings associated with staff realignments completed in the 
second quarter of fiscal 1998.  The increases 

                                          9

<PAGE>

                                  UNIFY CORPORATION
                                           

in fiscal 1998 SG&A expenses as a percentage of total revenues were 
attributable to the decline in fiscal 1998 revenues as compared to the same 
periods of the prior year.  The Company expects that total SG&A expenses will 
fluctuate from quarter to quarter primarily because of variability in 
marketing program spending and sales commission expense.

PROVISION FOR INCOME TAXES

    The Company recorded tax provisions for the three and six months ended 
October 31, 1997 and 1996 which related primarily to foreign income tax 
withholding on software license royalties paid to the Company by certain 
foreign licensees.  For the same periods, the Company recorded no federal or 
state income tax provisions as the Company had substantial net operating loss 
carryforwards.

VOLATILITY OF STOCK PRICE AND GENERAL RISK FACTORS AFFECTING QUARTERLY RESULTS

    The Company's common stock price has been and is likely to continue to be 
subject to significant volatility.  A variety of factors could cause the 
price of the Company's common stock to fluctuate, perhaps substantially, 
including: announcements of developments related to the Company's business; 
fluctuations in the Company's quarterly operating results and order levels; 
general conditions in the computer industry or the worldwide economy; 
announcements of technological innovations; new products or product 
enhancements by the Company or its competitors; changes in financial 
estimates by securities analysts; developments in patent, copyright or other 
intellectual property rights; and developments in the Company's relationships 
with its customers, distributors and suppliers.  In addition, in recent years 
the stock market in general, and the market for shares of equity securities 
of many high technology companies in particular, has experienced extreme 
price fluctuations which have often been unrelated to the operating 
performance of those companies.  Such fluctuations may adversely affect the 
market price of the Company's common stock.

    The Company's quarterly operating results have varied significantly in 
the past, and the Company expects that its operating results are likely to 
vary significantly from time to time in the future.  Such variations result 
from, among other factors, the following:  the size and timing of significant 
orders and their fulfillment; demand for the Company's products; the number, 
timing and significance of product enhancements and new product announcements 
by the Company and its competitors; ability of the Company to attract and 
retain key employees, especially in the sales organization; seasonality; 
changes in pricing policies by the Company or its competitors; realignments 
of the Company's organizational structure; changes in the level of the 
Company's operating expenses; changes in the Company's sales incentive plans; 
budgeting cycles of the Company's customers; customer order deferrals in 
anticipation of enhancements or new products offered by the Company or its 
competitors; product life cycles; product defects and other product quality 
problems; the results of international expansion; currency fluctuations; and 
general domestic and international economic and political conditions.  
Because a significant portion of the Company's revenues have been, and the 
Company believes will continue to be, derived from orders ranging in size 
from several hundred thousand dollars to approximately $1 million, the timing 
of such orders and their fulfillment has caused and is expected to continue 
to 

                                          10

<PAGE>

                                  UNIFY CORPORATION
                                           

cause material fluctuations in the Company's operating results, particularly 
on a quarterly basis.  In addition, the Company has recently expanded its 
North American direct sales force and the rate at which new sales people 
become productive could also cause material fluctuations in the Company's 
quarterly operating results.

    Because of the foregoing factors, quarterly revenues and operating 
results are difficult to forecast.  Revenues are also difficult to forecast 
because the market for client/server application development software is 
rapidly evolving, and the Company's sales cycle, from initial evaluation to 
purchase and the provision of maintenance services, is lengthy and varies 
substantially from customer to customer.  In particular, with the fiscal 1997 
release of Unify VISION 3.0 and VISION/Web the Company has experienced new 
opportunities to compete for larger, enterprise-level sales transactions.  
These transactions have even longer sales cycles than the Company has 
experienced in the past. Because the Company normally ships products within a 
short time after it receives an order, it typically does not have any 
material backlog.  As a result, to achieve its quarterly revenue objectives, 
the Company is dependent upon obtaining orders in any given quarter for 
shipment in that quarter. Furthermore, because many customers place orders 
toward the end of a fiscal quarter, the Company generally recognizes a 
substantial portion of its revenues at the end of a quarter.  As the 
Company's expense levels are based in significant part on the Company's 
expectations as to future revenues and are therefore relatively fixed in the 
short term, if revenue levels fall below expectations operating results are 
likely to be disproportionately adversely affected.

    The Company also expects that its operating results will be affected by 
seasonal trends.  The Company believes that it is likely it will experience 
relatively higher revenues in fiscal quarters ending April 30 and relatively 
lower revenues in fiscal quarters ending July 31 as a result of efforts by 
its direct sales force to meet fiscal year-end sales quotas.  The Company 
also anticipates that it may experience relatively weaker demand in fiscal 
quarters ending July 31 and October 31 as a result of reduced business 
activity in Europe during the summer months.

    In particular, because of the foregoing factors and because of longer 
sales cycles associated with Unify VISION 3.0 and VISION/Web, the Company 
expects that it will incur an operating loss for the quarter ending January 
31, 1998.  The Company has incurred net losses in five of the last eight 
fiscal quarters and in each of the last five fiscal years.  There can be no 
assurance regarding when or if the Company will return to profitability.

LIQUIDITY AND CAPITAL RESOURCES

    At October 31, 1997, the Company had cash, cash equivalents and 
short-term investments of $11.1 million, compared to $16.6 million at April 
30, 1997.  Working capital decreased to $5.3 million at October 31, 1997 from 
$7.6 million at April 30, 1997.

    The Company's operating activities used cash of $3.3 million during the 
six months ended October 31, 1997, primarily for operating losses.  Investing 
activities during the period generated cash of $1.4 million, consisting 
principally of net sales of short term investments of $1.7 million offset by 
equipment purchases of $0.4 million.  Cash used in financing activities 
during the

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<PAGE>
                                  UNIFY CORPORATION
                                           

period was $2.0 million, representing primarily the retirement of the $2.2 
million stockholder line of credit which expired in July 1997.

    The Company believes that current cash, cash equivalents and short-term 
investments will be sufficient to meet its cash requirements during the next 
12 months.  Thereafter, depending on its operating results, the Company may 
require additional equity or debt financing to meet its working capital or 
capital equipment requirements.  There can be no assurance that additional 
financing will be available when required or, if available, that it will be 
on terms satisfactory to the Company.

PART II.  OTHER INFORMATION

ITEM 5.  OTHER INFORMATION

         Susan Salvesen, Vice President, Finance and Administration and Chief
         Financial Officer, resigned her position effective September 19, 
         1997.

         D. Kirkwood Bowman, Director, resigned his position effective
         November 25, 1997.


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)  Exhibits

              Exhibit 11.1   Statement of Computation of Net Loss Per Share

              Exhibit 27     Financial Data Schedule


         (b)  Reports on Form 8-K

              The Company filed no reports on Form 8-K during the quarter 
              ended October 31, 1997.



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<PAGE>

                                  UNIFY CORPORATION
                                           
                                      SIGNATURE
                                           

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.


Date:  December 5, 1997             Unify Corporation
                                    (REGISTRANT)



                                    By:


                                    Todd Wille
                                    ------------------------------------------
                                    Todd Wille
                                    Vice President, Finance and Administration
                                    and Chief Financial Officer (Principal
                                    Financial and Accounting Officer)



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